Income Taxes

The Company is required to file a consolidated
U.S. federal income tax return and various state tax returns.

The components of income tax expense (benefit)
are as follows:

December 31

2018

2017

Current:

Federal

$

—

$

—

State and local

82

—

82

—

Deferred:

Federal

731

356

State and local

273

204

1,004

560

Change in valuation allowance

—

—

Income tax provision (benefit)

$

1,086

$

560

The Company recorded a deferred tax liability
of $1,641 and $560 as of December 31, 2018 and 2017, respectively, related to the acquisition of Benchmark Builders, Inc. This
deferred tax liability was recorded to account for the book vs. tax basis difference related to the goodwill intangible asset,
which was recorded in connection with the acquisition. This deferred tax liability was excluded from sources of future taxable
income, as the timing of its reversal cannot be predicted due to the indefinite life of the goodwill. As such, this deferred tax
liability cannot be used to offset the valuation allowance.

Deferred income taxes reflect the net effects
of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes. The Company’s deferred tax assets relate primarily to its net operating loss carryforwards
and other balance sheet basis differences. In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation
allowance to fully offset the gross deferred tax asset, because it is not more likely than not that the Company will realize future
benefits associated with these deferred tax assets at December 31, 2018 and 2017.

On December 22, 2017, new legislation was signed
into law, informally titled the Tax Cuts and Jobs Act, which included, among other things, a provision to reduce the federal corporate
income tax rate to 21%. Under ASC 740, Accounting for Income Taxes, the enactment of the Tax Act also requires companies, to recognize
the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax
laws in the period in which the new legislation is enacted. There is no further change to its assertion on maintaining a full valuation
allowance against its U.S. deferred tax assets. The Company’s gross deferred tax assets have been revalued from 34% to 21%
with a corresponding offset to the valuation allowance and any potential other taxes arising due to the Tax Act will result in
reductions to its net operating loss carryforward and valuation allowance. The reduction of the corporate tax rate resulted in
a write-down of the gross deferred tax asset of approximately $4,700, and a corresponding write-down of the valuation allowance.
Upon completion of our 2017 U.S. income tax return in 2018 the Company may identify additional remeasurement adjustments to our
recorded deferred tax liabilities. We will continue to assess our provision for income taxes as future guidance is issued, but
do not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the
measurement period guidance outlined in Staff Accounting Bulletin No. 118.

At December 31, 2018 and 2017, the Company
had net deferred tax assets of $39,500 and $22,125, respectively, against which a valuation allowance of $41,100 and $21,700, respectively,
had been recorded. The determination of this valuation allowance did not take into account the Company’s deferred tax liability
for goodwill assigned an indefinite life for book purposes, also known as a “naked credit” in the amount of $1,640
and $560 at December 31, 2018 and 2017, respectively. The change in the valuation allowance for the year ended December 31, 2018
was an increase of $19,400. The increase in the valuation allowance for the year ended December 31, 2018 was mainly attributable
to increases in net operating losses and accrued liabilities. The increase in the valuation allowance for the year ended December
31, 2017 was mainly attributable to increases in net operating losses and accrued liabilities, partially offset by a decrease in
the gross deferred tax assets caused by the decrease in the corporate tax rate.

Significant components of the Company’s
deferred tax assets at December 31, 2017 and 2016 are as follows:

December 31

2018

2017

Deferred tax assets:

Net operating loss carryforwards

$

39,996

$

18,587

Interest expense limitation

1,983

—

Accrued liabilities

1,442

1,139

Intangible assets

1,201

1,119

Stock-based compensation

1,395

1,061

Reserves

95

219

Gross deferred tax assets

46,112

22,125

Valuation allowance

(41,121

)

(21,682

)

Gross deferred tax assets after valuation allowance

4,991

443

Deferred tax liability – unrealized gains

(4,557

)

—

Deferred tax liability – goodwill

(1,641

)

(560

)

Deferred tax liability – property and equipment

(434

)

(443

)

Net deferred tax liability

$

(1,641

)

$

(560

)

A reconciliation of the federal statutory tax
rate and the effective tax rates for the years ended December 31, 2018 and 2017 is as follows:

December 31

2018

2017

U.S federal statutory rate

21.0

%

34.0

%

State income taxes, net of federal benefit

6.5

%

1.7

%

Nondeductible – meals & entertainment

(0.1

)%

(0.1

)%

Warrant derivative gains or losses

4.2

%

(0.1

)%

Impact of tax law change

—

%

(15.5

)%

Change in valuation allowance

(32.9

)%

(20.9

)%

Other

(0.6

)

0.2

%

Effective tax rate

(1.9

)%

(0.7

)%

The Company had approximately $166,300 and
$83,700 of available gross net operating loss (“NOL”) carryforwards (federal and state) as of December 31, 2018 and
2017, respectively, which begin to expire in 2032. However, the Company has not yet filed its tax returns for its fiscal years
ended September 30, 2013, September 30, 2014, September 30, 2015, September 30, 2016, December 31, 2016, December 31, 2017 or December
31, 2018. Therefore, the Company’s NOLs will not be available to offset future taxable income, if any, until the returns
are filed.

Sections 382 and 383 of the Internal Revenue
Code, and similar state regulations, contain provisions that may limit the NOL carryforwards available to be used to offset income
in any given year upon the occurrence of certain events, including changes in the ownership interests of significant stockholders.
In the event of a cumulative change in ownership in excess of 50% over a three-year period, the amount of the NOL carryforwards
that the Company may utilize in any one year may be limited. Beacon had generated approximately $25,000 of NOLs prior to the Beacon
Merger, which the Company’s preliminary analysis indicates would be subject to significant limitations pursuant to Internal
Revenue Code Section 382, such that no deferred tax asset has been reflected herein related to the Beacon NOLs.

The Company has not yet assessed whether an
ownership change under Section 382 occurred during the years ended December 31, 2018 and 2017. If an ownership change occurred,
there is a potential that a portion of the Company’s NOLs could be limited. However, since there is a full valuation allowance
offsetting the deferred tax asset related to the NOL, a limitation should not have a material impact on the Company’s financial
statements. The Company will continue to monitor its ownership changes for purposes of Section 382.

During the period of September 30, 2014 through
December 31, 2017, the Company operated primarily in Florida, Indiana, Nevada, North Carolina, Colorado, Texas, Iowa, Washington,
Missouri, Georgia, and New York. If the Company is required to pay income taxes or penalties in the future, penalties will be recorded
in general and administrative expenses and interest will be separately stated as interest expense. The Company has not yet filed
its tax returns for its fiscal years ended September 30, 2012, September 30, 2013, September 30, 2014, September 30, 2015, September
30, 2016, December 31, 2016, December 31, 2017 or December 31, 2018, but has engaged an accounting firm to begin to compile the
past due returns. The Company’s tax returns for the periods from October 1, 2012 through December 31, 2018 remain subject
to examination and may be subject to penalties for late filing.

The Company does not have any uncertain tax
positions for which it is reasonably possible that the total amount of gross unrecognized tax benefits will increase or decrease
within 12 months as of December 31, 2018. The unrecognized tax benefits may increase or change during the next year for items that
arise in the ordinary course of business.

Income Taxes (Predecessor)

The Predecessor was taxed as a Sub Chapter
S-Corporation in 2016 and the period from January 1, 2017 through April 20, 2017 which is a non-taxing entity for Federal income
tax purposes. With the exception of the New York State minimum tax, the shareholders of Benchmark include their respective share
of the income or loss in their personal income tax returns accordingly. New York City does not acknowledge S-Corp status and assesses
taxes at the corporate level. Local income taxes incurred amounted to $240 for the period from January 1, 2017 through April 20,
2017.

Benchmark is current with respect to its Federal,
State and City income tax filing requirements. Management is not aware of any issues or circumstances that would unfavorably impact
its tax status. Management has determined that Benchmark had no uncertain tax positions that would require financial statement
recognition. The Company is a non-taxing entity for both Federal and State income tax purposes and its temporary differences between
financial statement carrying amount and income tax bases are not material. Therefore, no deferred tax was calculated. The Company’s
effective local tax rate was 7.5% and 48.6% for the year ended December 31, 2016 and the period from January 1, 2017 through April
20, 2017, respectively. The effective rate is less than the statutory rate for the year ended December 31, 2016 due to an immaterial
under accrual of local taxes and more than the statutory rate for the period from January 1, 2017 through April 20, 2017 due to
an immaterial over accrual of local taxes which the effective rate is also impacted due to the short tax period.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.